You have just turned 18. Your grandmother has been putting $1,000 into a savings account...
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You have just turned 18. Your grandmother has been putting $1,000 into a savings account on every birthday since your first (that is, when you turned 1, t=1 on the timeline). The last deposit is on your 18th birthday. The account pays an interest rate of 5% per year.
a. Calculate the present value of all deposits on the day you were born (0).
b. Calculate the present value of these deposits on your first birthday, immediately before the first deposit (v 1).
c. How much money is in the account on your 18th birthday, immediately after your grandmothers last deposit (18)?
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